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Updated on June 27, 2022 1:18 am

US Stock Futures Climb Before Key Inflation Report: Markets Wrap

(Bloomberg) — US equity futures edged higher on Wednesday before US inflation data that will shape investor expectations for further Federal Reserve interest-rate hikes.

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S&P 500 contracts gained 0.3%, following a fourth session of declines in the underlying gauge Tuesday after Micron Technology Inc. became the latest chipmaker to warn of slowing demand. Nasdaq 100 futures rose 0.5%. Tesla Inc. climbed in premarket trading after Chief Executive Officer Elon Musk’s biggest share sale on record. Europe’s Stoxx 600 Index erased an early drop.

Bonds steadied. The two-year Treasury rate exceeds the 10-year by almost 50 basis points. The inversion, around the deepest since 2000, is viewed as a sign of a looming recession under the Fed’s monetary-tightening campaign to curb inflation.

A report Wednesday is expected to show headline US consumer-price inflation cooled but stayed elevated in July, while the core reading may have quickened on an annual basis. How the figures affect views on Fed tightening will be key for risk sentiment.

“Today’s inflation number could set the tone for the markets for the rest of the month,” said Craig Erlam, a senior market analyst at Oanda. “A lower-than-expected number could be a major tailwind for the markets while anything around or above the June reading could trigger a big risk reversal in the markets as the debate shifts to 75 or 100 basis points, with 50 left in the rearview mirror.”

A dollar gauge slipped, while crude oil traded around $90 a barrel, and both gold and Bitcoin edged lower.

Federal Reserve Bank of St. Louis President James Bullard said the US central bank will be prepared to hold interest rates “higher for longer” should inflation continue to surprise to the upside.

The Fed “will be driving those short rates higher,” said Gary Schlossberg, a global strategist for Wells Fargo Investment Institute, on Bloomberg Television. “We will be seeing a deepening inversion and a full inversion of the Treasury yield curve.”

China’s military said exercises held around Taiwan in response to US House Speaker Nancy Pelosi’s visit had concluded, while pledging to continue regular patrols near the island.

Musk sold $6.9 billion of shares in Tesla, the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc. Tesla rose 2.7% in premarket trading.

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What to watch this week:

  • US CPI data, Wednesday

  • Chicago Fed President Charles Evans and his Minneapolis counterpart Neel Kashkari due to speak, Wednesday

  • US PPI, initial jobless claims, Thursday

  • San Francisco Fed President Mary Daly is interviewed on Bloomberg Television, Thursday

  • Euro-area industrial production, Friday

  • US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:


  • The Stoxx Europe 600 was little changed as of 9:51 a.m. London time

  • Futures on the S&P 500 rose 0.3%

  • Futures on the Nasdaq 100 rose 0.5%

  • Futures on the Dow Jones Industrial Average rose 0.3%

  • The MSCI Asia Pacific Index fell 0.8%

  • The MSCI Emerging Markets Index fell 1%


  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro was little changed at $1.0221

  • The Japanese yen was little changed at 134.97 per dollar

  • The offshore yuan was little changed at 6.7611 per dollar

  • The British pound rose 0.1% to $1.2098


  • The yield on 10-year Treasuries was little changed at 2.77%

  • Germany’s 10-year yield declined two basis points to 0.90%

  • Britain’s 10-year yield declined one basis point to 1.96%


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